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Norfolk Southern OctNorth American intermodal operator Norfolk Southern has recorded a four percent decline in Q3 revenues.

Third-quarter net income was US$657 million and diluted earnings per share were $2.49. The operating ratio for the quarter was 64.9 percent, a third-quarter record for NS. These results include a $32 million write-off of a receivable resulting from a legal dispute, which unfavorably impacted the operating ratio by 110 basis points and earnings per share by $0.09.

“Our team achieved a record third-quarter operating ratio while successfully rolling out the first phase of our TOP21 operating plan, followed by the swift transition to the plan’s second phase. These efforts produced an 11 percent reduction in crew starts and recrews compared to the third-quarter last year, robustly outpacing the 6% volume decline while maintaining resilient service that supported an 11th consecutive quarter of year-over-year revenue per unit growth,” said James A. Squires, Norfolk Southern chairman, president and CEO.

“Initiatives to reimagine mechanical operations while maintaining a more efficient fleet of locomotives and railcars also progressed, as these and other efforts delivered significant cost savings this quarter. Looking ahead, additional productivity will be generated as we advance to the third phase of TOP21 and execute initiatives surrounding fuel efficiency, distributed power, intermodal operations, and our mechanical network, just to name a few. Norfolk Southern remains fully dedicated to our strategic plan for the creation of shareholder value through sweeping productivity improvements while maintaining a superior service product for our customers.”

Third-quarter summary and highlights: Railway operating revenues of $2.8 billion decreased four percent compared with third-quarter 2018, as a two percent increase in average revenue per unit partially offset a six percent decline in total volume. Railway operating expenses were $1.8 billion, a decrease of $82 million compared with the same period last year. Lower compensation and benefits, equipment rents, and fuel prices were partially offset by a $32 million write-off of a receivable resulting from a legal dispute and increased depreciation expense.

Income from railway operations was $1.0 billion, a decrease of $24 million year-over-year. The railway operating ratio was a third-quarter record 64.9 percent, despite the unfavorable impact of 110 basis points related to a legal dispute. Increased quarterly dividend by nine percent from $0.86 to $0.94 per share.

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